India-Japan Stretegic dialogue takes up 2 projects for financing

Published: Friday, July 25, 2008, 21:32 [IST]

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New Delhi, Jul 25 (UNI) The second India-Japan Strategic dialogue in Tokyo today centred on two major infrastructure projects relating to Japanese support for Delhi-Mumbai Dedicated Freight Corridor and Delhi-Mumbai Industrial Corridor.

The Indian delegation was led by Finance Secretary D Subbarao and the Japanese delegation was led by Deputy Minister of Foreign Affairs of Japan M Kohno.

Japanese support for the new IIT coming up at Hyderabad as well as collaboration in information and technology and basic science research were other items on the agenda.

This dialogue assumes significance as it sets the agenda for the visit of Prime Minister Manmohan Singh to Japan in October.

The other memebers of the Indian delegation were Mr H K Singh, Indian Ambassador to Japan, Mr Sanjay Krishna, Joint Secretary in the Ministry of Finance and Mr R Ramanujam, Minister (Economic) in the Indian Embassy.

Addressing a Roundtable Conference of a select group of Japanese businessmen, industrialists, bankers and financial analysts, the Finance Secretary said Japanese investment in India, although sizable, is still far short of the potential of Japan to invest or the capacity of India to absorb.

India, he said, offers a huge market with a growing middle class and rising incomes, and, hence, very rewarding investment opportunities, particularly in the infrastructure sectors.

There is a need to exploit the natural complementarities between India and Japan and increase Japanese engagement in India to the mutual advantage of both countries, Dr Subbarao said.

Clocking an annual growth of 8.9 per cent on a compound average basis over the last five years, the Finance Secretary expressed optimism that the India growth story is still credible and intact.

India's growth is based on strong fundamentals and the current expansion is not a one off episode. Growth this year could, of course, moderate because of pressures of inflation and the global downturn, he said.

Responding to whether India could decouple from the rest of the world, the Finance Secretary said in a rapidly globalising world, it is not possible for any country to 'decouple' from the global developments.

''If any large economy could, in fact, decouple, it is India.

This is because India's growth draws largely from domestic demand and investment unlike a number of other fast growing Asian economies,'' Dr Subbarao said.

The Finance Secretary said the inflationary pressures at the global level will subside when the supply response takes effect over the next few months.